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JMP: Changing Competitive Landscape Makes Revance Less Appealing

Shanthi Rexaline

Revance Therapeutics Inc (NASDAQ: RVNC), a biotech company developing a botulinum toxin product, could face a competitive backlash, according to JMP Securities.

The Analyst

Analyst Donald Ellis downgraded Revance from Market Outperform to Market Perform.

The Thesis

The downgrade of Revance is based on Allergan plc (NYSE: AGN)'s recently released data in Botox responders showing that 80 units of Botox 80 produced a more than 1-point improvement in 24 weeks in 39 percent of study patients, Ellis said in a Monday note. (See his track record here.)  

Revance is testing RT002, daxibotulinumtoxinA injection, in a Phase 3 study for Glabellar Lines while also pursuing Phase 2 trials for cervical dystonia and plantar fasciitis.

Revance's RT002 showed similar improvement in about 42 percent of study population, the analyst said. 

"AGN's data suggest that the longer duration of activity for RT002 may be partially or primarily due to a 'dose' effect," Ellis said.

Allergan's recent data minimizes the benefit of extended duration claims for RT002 vs. Botox, the analyst said. 

The FDA requires a more than or equal to 2-point improvement, and none or mild on wrinkle severity, which both companies have not disclosed, he said. 

JMP does not expect the companies to make 24-week claims.

"AGN can educate doctors on longer duration with higher doses at medical conferences, but its reps cannot legally promote longer duration directly to doctors," Ellis said. 

The Price Action

Revance was down 8.28 percent at $23.55 at the close Monday, while Allergan was down 2.09 percent at $184.29. 

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Latest Ratings for RVNC

Date Firm Action From To
Sep 2018 JMP Securities Downgrades Market Outperform Market Perform
Mar 2018 Goldman Sachs Initiates Coverage On Buy
Jan 2018 Guggenheim Downgrades Buy Neutral

View More Analyst Ratings for RVNC
View the Latest Analyst Ratings

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